Overcapacity hurts BOPP film market

World demand for biaxially oriented polypropylene (BOPP) film has grown by 8.5% per annum, or 1.4 million tpa, over the past five years. It reached an estimated 4.27 million tonnes in 2005, according to a report by market analysis firm PCI Films Consulting.
It expects demand for BOPP film to continue to grow by 5.9% per annum to reach 5.7 million tpa by 2010. Asian demand is expected to account for more than two thirds of world growth over the next five years and 57% of capacity additions (world capacity growth is forecast at 12%).
The report also found that BOPP film producers have been more than keeping pace with demand, having installed an additional 2.39 million tpa over the last five years.
Around 62% of this incremental capacity was commissioned by China, resulting in significant oversupply in some regions increasing competitor activity.
The report warned: “World BOPP film producers face an uncertain future with profits and volumes severely under threat. Clear strategies for meeting these challenges are essential for survival.”

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